Larry Williams: One of the Most Successful Forex Traders

04Aug

Larry R. Williams is a famous futures and commodity trader born in 1942 in the state of Montana. Williams is well-known for the large number of market indicators he has created, including the Ultimate Oscillator, the Williams %R indicator, market sentiment, COT indices, cycle forecasts and others.

Larry R. William’s early life

A graduate of the School of Journalism at the University of Oregon, Williams began his Forex trading career in 1965. He quickly established himself as a top commentator with innovative views on the currency market. Soon after that he developed his most successful trading tool called the Williams %R momentum indicator. A few years later, Williams started writing investment books, combining his journalism skills with his vast financial knowledge and experience.

Turning $10,000 into $1,100,000

In 1987, Larry R. Williams won the World Cup Championship of Futures Trading, managing to make $1,100,000 with a starting investment of just $10,000. This incredible success was achieved in 12 months and was based primarily on Larry’s groundbreaking futures trading methods. He later published a book about this experience called “How I Made One Million Dollars Last Year Trading Commodities”.

Many beginner traders who are fascinated by the success of investors like Williams rush into investing without first learning the basics of trading. This approach is often doomed to failure because risking money by simply copying somebody else’s strategy does not always yield the same results. There is no such thing as "easy money" and it takes knowledge and experience to be profitable in the long run. Investors should not risk much of their capital before they have developed the skill to foresee a big market move and act accordingly.

When trading futures there are certain things that need to be taken into consideration. Trend is one of them and you want to stay on its side. By simply using a ten-week moving average on an asset, you can define the trend’s course. Another important factor crucial for your success is money management. When trading commodities you need to know in advance the number of contracts that you are able to trade and the risk level that you can afford. A good rule is that you should not invest more than thirty percent of your equity, and if you are a novice trader, the percent is even lower – 20%. Trading on more than six markets at a time is not recommended, which means that you don’t want to risk more than 5 percent of your capital on a single trade.

If you decide to trade commodities, a good idea is to follow the commercial firms. These are the biggest players on the commodity market and are responsible for the production, processing and merchandising of all commodities. The indicator called Open Interest is a reflection of their trading activity and is very useful when the market is trading in a range. In case there is a 30% increase of the Open Interest, this could be considered a bearish indicator. And the opposite, if there is a 30% decrease in the Open Interest, it is very likely a bullish indicator.

As already mentioned, you need more than just one skill to be a successful futures trader. Two of the complementary indicators that can be applied when building your strategy are cycles and seasonal tendencies. Price scale is considered more important than duration when cycles are analyzed and it is believed that trading moves from small range days to days with large ranges. This is the time when it’s possible to benefit from big price movements. Seasonal tendencies on the other side can be useful because they show the approximate times during the year when markets reach their peaks and lows. Although a valid indicator, Seasonals are not constant and must be used as an additional tool only.

Trading Forex and commodities presents many opportunities to traders. With LiteForex you can trade currencies, and CFDs on commodities like: oil, gold, silver, platinum, and palladium. If you’re a novice trader you can first practice the markets using a Demo account or you can open a Live account.

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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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